The Latin phrase economists use that means all else equal is
A. cogito ergo sum.
B. caveat emptor.
C. carpe diem.
D. ceteris paribus.
Answer: D
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Which of the following is NOT a reason that credit ratings agencies became more relevant beginning in the late 1970s?
A) the number of bond defaults rose due to periods of recession and inflation B) rating agencies began to charge investors for their services C) governments began to include bond ratings in their regulation of banks, mutual funds, and other financial firms D) rating agencies began to rate bonds issued by foreign governments and firms
Unemployment, especially in the long term, tends to increase the faith people have in social institutions such as government
a. True b. False Indicate whether the statement is true or false
How does the ECB choose to define price stability?
A) Eurozone consumer price inflation of less than but close to 2% per year over the medium term B) consumer price inflation of greater than but close to 3% per year over the medium term in all Eurozone countries C) Eurozone consumer price inflation equal to 0% per year over the medium term D) Eurozone consumer price inflation less than but close to 5% per year over the medium term
The difference in the prices of a good in two countries creates opportunities for arbitrage: traders buy the good at a low price in one country and sell it at a higher price in the other. When the difference in the prices vanishes, and the world price is established in both countries, there is no scope for trade anymore because no trader will be willing to buy the good in one country and sell it in another. Discuss the validity of this statement.
What will be an ideal response?